Bills expand responsibility for contractor pay

SACRAMENTO &GT;&GT; California businesses would be held responsible when contract workers they hire to clean their buildings, fill their warehouse shelves and deliver their goods are not paid or are denied overtime under a pair of bills advancing through the Legislature.

The legislative efforts are an attempt to address what economists say is a rise in lower-wage and temporary jobs in California, even as the official unemployment rate falls steadily.

Unions and Democratic lawmakers are responding to this shift in the economy with legislation to prevent businesses from avoiding their obligations under California's strong labor laws by replacing full-time staff with contracted employees.

AB2416 by Assemblyman Mark Stone, D-Scotts Valley, would allow workers to place liens for unpaid wages on their employer's property, as well as property where they performed work, such as office buildings protected by private security guards. AB1897 by Assemblyman Roger Hernandez, D-West Covina, would make sure that employers share liability with staffing agencies and contractors for workers' wages.

Both bills won approval as part of a flurry of legislative activity last week as lawmakers met a deadline to pass legislation from one house to the next. They now head to the Senate after passing the Assembly on party-line votes.

While supporters say the efforts would help the lowest-paid workers in California, such as farmworkers, business groups say they unfairly punish companies that did nothing wrong.

"They just immediately hold non-employers liable for the acts of another, regardless of whether or not the third party had an opportunity to prevent the acts from occurring," said Jennifer Barrera, a lobbyist for the California Chamber of Commerce.

The authors of the bills say they are not trying to penalize innocent companies, but say those businesses should be accountable for the workers who come through their doors.

"The more there are pressures on employers to do the right thing for their employees, we can minimize the claims and problems that are out there," said Stone, the author of the wage lien bill.

For example, a study last year by the UCLA Labor Center and the National Employment Law Project found 83 percent of workers with successful wage claims in California between 2008 and 2011 never recovered their paychecks. If his bill is signed into law, Stone expects businesses to draw up agreements to protect themselves from liens by making sure contractors have money available to pay wage claims.

The idea is not new. California homeowners, for example, are responsible for making sure subcontractors, including roofers and plumbers, are paid when they remodel their houses under the state's mechanics lien. In practice, the state encourages homeowners to pay subcontractors with joint checks to avoid liens. Stone's bill does not expand subcontracted employees' powers to place liens on homes where they worked, but it does allow for household workers such as maids to do so.

Barrera said the better solution to recovering unpaid wages is to give more power to the state's labor commissioner, rather than allowing employees to place liens without presenting evidence.

Hernandez said his worker liability bill responds to a "race to the bottom" of employers seeking low-cost staffing agencies and subcontractors that pay little and do not take steps to protect employees. He cited a 2012 report by the UC Berkeley Labor Center finding that temporary workers are twice as likely to be in poverty.

"This model is a big part of why California's middle class is shrinking," he said. "The employer-client (of a staffing agency) should not be able to continue hiding behind a middle man."

Hernandez said his bill encourages businesses to work with agencies that have a better track record of upholding worker rights by making them share responsibility for obtaining worker's compensation insurance and tracking hours worked. Business groups say the law already has enough protections.

Other bills that attracted attention during the legislative session's halfway point:

— SB1017: The bill by Sen. Noreen Evans, D-Santa Rosa, to raise $1.6 billion by imposing an extraction tax on companies that drill for oil in California failed to advance out of the Senate Appropriations Committee on May 23. The bill would have imposed a 9.5 percent per barrel tax on oil and a 3.5 percent per unit tax on natural gas. Another oil-related bill, SB1132 by Sen. Holly Mitchell, D-Los Angeles, would have halted the oil and gas extraction process known as fracking until a state-commissioned study proves it is safe, but failed to get enough support in the Senate to pass.

— SB1000 by Sen. Bill Monning, D-Carmel, would require warning labels on sodas and other sugary drinks. Monning and other supporters argue that the nation's first such statewide requirement would help combat childhood obesity, diabetes and other health problems as part of a larger education campaign. The California-Nevada Beverage Association and other opponents say the last thing California needs is more warning labels. The groups doubt the labels would have much influence on individual behavior. It passed the Senate on a 21-13 vote, the bare majority needed.

— SB1266: The Senate approved the bill by Sen. Bob Huff, R-Diamond Bar, on a 37-0 vote. It would require school districts, charter schools and county offices of education to provide emergency epinephrine auto-injectors, otherwise known as EpiPens, to trained volunteer workers. The bill builds on previous legislation — particularly SB669 signed by Gov. Jerry Brown last year to allow trained and certified individuals to obtain and use EpiPens — that makes it easier for people with life-threatening allergies to access emergency treatment.

— SB1182: The bill by Sen. Mark Leno, D-San Francisco, requires state regulators to review health policy rates of large group plans with 1,000 workers or more anytime the rates increase by more than 5 percent a year. Currently, only individual and small group health plan contracts and insurance policies are filed with the state's Department of Managed Health Care or Insurance Department. The Senate passed the bill on a partisan vote, 21-12.

— SB1210: On a 26-11 vote, the Senate passed the legislation by Sen. Ricardo Lara, D-Los Angeles. It would establish the California Dream Loan Program in University of California and California State University systems to provide loans to student who are in the country illegally and cannot access federal or private student loans. In recent years, the state has made it easier for immigrant students to afford college by allowing them to pay in-state tuition and qualify for state-funded aid such as Cal Grants. Lara said the loan program is needed to fill an estimated $6,000 gap at UCs and a $3,000 gap at CSUs because those students don't qualify for traditional student loans.

— AB1839: The Assembly, on a 62-0 vote, approved an extension of California's film tax credit by Democratic Assemblymen Mike Gatto and Raul Bocanegra of Los Angeles. The bill is intended to keep entertainment productions from leaving the state by extending the existing program for five years and lifting a budget cap on feature films that are eligible. The bill also allows one-hour television series, including original programming on streaming services such as Netflix, to apply. Lawmakers touted the cultural and tourism benefits of the entertainment industry after a report by the nonpartisan Legislative Analyst's Office doubted whether the tax credit program would reverse production declines.